What a cash allowance means
Many business checking accounts include a stated dollar amount of cash deposits each statement cycle without an additional processing charge. Once the business exceeds that amount, the bank may charge a fee per $100 deposited. The precise definition and pricing are bank-specific.
Why cash-heavy businesses need a different comparison
Restaurants, convenience stores, salons, trades and other businesses that receive physical currency can quickly exceed a small cash allowance. A seemingly inexpensive account can become costly if the business regularly deposits $10,000, $20,000 or more in cash each month.
Branch and ATM access matter
The fee schedule is only part of the decision. Compare branch proximity, business hours, night-drop availability, ATM cash-deposit capability and how quickly deposits are credited. A bank with a slightly higher fee but much better deposit access may reduce staff time and operational risk.
Model the overage
Estimate monthly cash deposits and subtract the account’s included allowance. Apply the bank’s excess-cash rate to the remainder. Repeat the calculation for a busy month. This simple model often changes which account is actually cheapest.
Security and control considerations
Businesses handling cash should also think about deposit frequency, employee access, dual control, armored transport if applicable, and reconciliation procedures. Banking cost is only one part of cash-management risk.
Primary sources and reference material
- Bank account agreements and fee schedules vary by institution; verify current terms with the provider.
Model the account around the way your business actually moves money.
Fees, balances, transactions, cash deposits, payment tools and controls should be evaluated together. A lower headline fee is not automatically the lower-cost operating account.